The first e-commerce business, Boston Computer Exchange, was created in 1982. That was long before the idea of Amazon was born. After Amazon’s phenomenal success, digital shopping has become a new normal for the growing global population.
In 2021 alone, over 2.14 billion people shopped online. In the US, 263 million people are online shoppers. That’s about 80% of the country’s population. And analysts are projecting that 90% of the country will be regular online shoppers by 2023.
Despite being a saturated market, the e-commerce industry is still buzzing with opportunities that beckon even the most amateur businesspeople. This article will walk you through the specifics of the e-commerce industry and proffer a 7-step guide to starting your own e-commerce business.
In 2021 alone, over 2.14 billion people shopped online.
What are e-commerce and e-business?
The term “e-commerce” is short for electronic commerce. It defines activities that involve the buying and selling of goods or services over the internet. However, a lot of businesses operate and transact on the internet today. This makes it quite confusing to specify which business is strictly an e-commerce business.
Technically, an e-commerce business is one with a business model that uses the internet as its primary medium of transaction. Several businesses have been created to meet this purpose, serving a unique set of customers.
E-business definition, on the other hand, is slightly different. It describes a business that operates and sustains itself entirely on the internet. Many e-businesses do not have a physical office.
90% of the US will be regular online shoppers by 2023.
Types of e-commerce business
Depending on the type of customers an e-commerce business serves, there are four categories of e-commerce.
- Business-to-Consumer (B2C): These businesses sell their products or services directly to consumers.
- Business-to-Business (B2B): Sometimes, businesses sell products or services that help other businesses serve their customers. When this business-to-business relationship is facilitated remotely over the internet, such a company is considered a B2B e-commerce business.
- Consumer-to-Consumer (C2C): Some businesses are set up for consumers to sell their products or services to other consumers. These are usually marketplaces for used products or auctioning rare items. eBay is a perfect example.
- Consumer-to-Business (C2B): This type of business is designed to serve creatives mainly. They are internet-based companies that help consumers sell their products or services to businesses. Freelance and creative licensing marketplaces are excellent examples.
7 Steps to start your eCommerce business
Now that you are familiar with the four types of e-commerce businesses out there, it’s time for you to find out how you can start yours. These seven steps simplify the complex process of setting up a functional e-commerce company.
Do your research
Nothing beats the old fashion research. You should first consider taking a deep look into the market you want to serve and verifying its viability.
Your research should enlighten you about the competition available in the market, the opportunities, and the threats you might face if you eventually decide to start your venture.
However, finding the right information to keep you abreast of these details can be confusing. There’s so much information published on the internet. Combing through them can take a century, but you can focus on some industry experts that have taken years to earn the general public’s trust.
Depending on the e-commerce business you wish to start, several credible information sources exist. For one, Shopify Reports is a trusted source of information. Reports from McKinsey, Statista, and CB Insights are also highly trusted.
Choose the right products or services
After conducting your research; you will most likely realize that some of the products you have in mind are already on the market. You can choose to pour a bucket of table salt into the Atlantic or find something less common but could be in high demand.
I suggest you find a demand that hasn’t been met completely and try meeting it. The fact that it’s an existing demand shows a viable opportunity there.
You can add other popular products to your catalog to increase sales and offer alternatives, but you should be known for these unique products.
Decide on your e-commerce business model
Now that you have chosen the products or services that will bring you closer to success; it’s time to figure out how to manage inventory and fulfill customer orders. This may not be a challenge if your business has been operating offline. You already have an inventory management process.
Starting out in the e-commerce space offers you a privilege not enjoyed in the offline world for an entirely new business. There are four effective business models that you can use to optimize business processes, increase sales, and cut down inventory waste to the minimum.
- Dropshipping: This model allows you to list products that are not even yours on your e-commerce website. You can set the product’s price and minimum order to fit your business plan and suit your target customers.
When a customer buys any products, the order is routed to the original owner, who then packages and ships the order to the customer. You get to keep a profit from the sale and don’t have to get in contact with the product.
- Produce (or print) on demand: If you own the product but do not have the necessary resources for a large inventory, you can utilize a print-on-demand or manufacture-on-demand model. With this model, products are only created when an order has been placed.
Usually, this incurs higher production costs, especially when you have to make the products in small quantities. As a solution, you can use batch production to make products in bulk after ordering a certain number.
This on-demand model is particularly great when you want to test a new product without making major financial commitments.
- White-labeling: This model works best if you already have an existing network of loyal customers or followers. This means rebranding an already existing, high-demand product.
For instance, you can simply work with a vitamins supplement manufacturer to make the same vitamins for their other clients. Then, get a packaging company to make containers and labels with your business name. Voila! You now own a vitamin supplement business.
- Subscriptions: This is pretty common these days. It’s primarily meant to increase a customer’s lifetime value (CLV). It is prevalent with service businesses since customers may have a recurring need for the services being provided. However, e-commerce businesses can utilize a subscription model for products as well.
You can curate a few products that customers will repeatedly need and create a subscription package for those products. For example, a skincare regimen and drugs for managing an incurable disease will be needed by customers on a recurring basis. So, a subscription can keep them from buying it elsewhere.
Pick the right platform(s)
You know your market, decide on the products to sell, and have a model to maximize your e-commerce business experience. Now, it’s time to pick the court you will play on. These courts are called e-commerce solutions (or platforms). And depending on the type of business and products you are offering, there are different solutions.
Here are a few highly trusted recommendations:
- Wix: This is a perfect solution for small businesses that use picture heavy-content to sell products. This platform is a delight for designers and visual creatives.
- Square Online: Square Online is the right platform if you fancy a DIY experience when setting up your e-commerce business. However, it can get demanding for one person if you have so many products to list.
- BigCommerce: If you have an existing business with inventories and are looking to use one of the e-commerce business models to your advantage, BigCommerce is a good option to consider. It is the perfect solution for established and high-growth businesses.
Create an irresistible home page
An exceptional homepage can separate the best e-commerce businesses from others. And since you are starting, you can use a good homepage design to your advantage.
Most e-commerce businesses can’t resist the urge to display as many products as possible in the homepage. This makes it congested and visually unpleasant.
Some of the best-selling businesses out there have simple layouts with dynamic designs. You can hire an excellent designer to put the homepage together for you. However, keep in mind that great content is your ticket to success.
Here are some of the elements you should consider including on your homepage to boost trust and convert visitors:
- For a starter, display your unique products to stand out.
- Share customer feedback, including their names (it adds a layer of credibility).
- Use high-quality images and concise sentences.
- Limit the colors to two or three (including backgrounds).
- Add effortless CTAs to avoid appearing too persistent.
- Make it responsive for all screen sizes.
Build responsive and optimized product pages
Having an attractive homepage is one thing. Making sure your product pages are not stretching over the margins of your customer’s screens is another thing. Having to pinch into a page on your smartphone while maintaining your grip on a New York train is a huge turn-off. So, invest some of your time into building a page that is adaptive regardless of the device.
Having responsive product pages is not enough to stand out. They should be visually appealing too. Use good quality pictures to present your products, write descriptions and headings in really lovely fonts, and use calm and eye-catching color combinations. And that’s not all.
80% of customers discover new products through search engine results.
Lightweight product pages have a higher chance of ranking in search engine results. You need to optimize your images to load fast to keep it lightweight. Remember, 80% of customers discover new products through search engine results. So, ensure that your product pages are built for search engines.
Search engines focus on content more than page architecture and the algorithms frown against content duplication. So, when you’re using a dropshipping or white-labeling model, you need to create unique product descriptions that are different from those on the manufacturers’ websites. This will help the search algorithms recognize it differently and enhance the page ranking.
Develop a marketing campaign
The “build it and they will come” mentality doesn’t work in our digitalized world today. If you build it, you have to market it. That applies to your e-commerce business too. You have to make a conscious effort to market your business.
For a moment, imagine that you choose to adopt a dropshipping model for your new e-commerce business. Customers may prefer to buy directly from the manufacturer, probably offering a lower price. By marketing your business, the product can be seen by people who didn’t even know it existed in the first place. That will consolidate your position in their life as a trusted source of such a product.
However, how you choose to market your product depends majorly on the type of business you are operating. B2C marketing is quite different from B2B. As such, you need to familiarize yourself with the market that you’re serving and develop the right marketing strategy for them.
You can utilize several marketing styles to increase awareness and convert new customers. These marketing styles may include email marketing, SEO, direct response, social media, etc. Interestingly, there are available tools that you can use to optimize and stay on top of everything.
In the US, e-commerce sales will exceed $1 trillion by 2022. The world is estimating $6 trillion to change hands in the e-commerce space by 2024. These projections reveal the enormous opportunity that exists in the e-commerce industry.
Therefore, while you may not be an early adopter of this type of business, you will not be late to the party if you choose to start your e-commerce business now. This 7-step guide is designed specifically to help you do that.